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| Hodine Williams |
I am tempted to admit and agree that he may very well have a point but this Cold War is defined not by the ideological clash of capitalism versus communism. My grandmother used to say, “there is nothing new under the sun” and here we have it, history repeating itself. The countries of the world, or maybe just a few, are battling for economic supremacy, technological dominance, and geopolitical influence. Indeed, things are messy, and the wind blows stronger each day. We will have to wait and see what emerges when the dust clears. Many argue that at the heart of this conflict lies the weaponization of sanctions — a tool that is increasingly reshaping international law and global trade. There was a time when sanctions were frowned upon and there was a consensus that they are unideal, especially if you promote the ideals of the free trade theorists. In any event, we are here.
As nations wield sanctions with unprecedented frequency and scale, the question arises: Are we entering an era where economic coercion becomes the norm, and what are the long-term implications for the global order?
The increasing use of sanctions as a geopolitical weapon
Sanctions are not a new phenomenon and stemming from the era of mercantilism, they were used to promote certain political ideals more so than trade-related issues. What history reveals is that they were used to achieve some arguable good outcomes. They have been used to pressure rogue states, punish human rights violations or deter aggression. However, their scope and frequency have skyrocketed in recent years. According to data from the United States Treasury Department, over the last two decades, U.S. sanctions have risen by approximately 900 per cent. It appears that the preferred option to enforce behaviour change utilized by the United States, European Union, and their allies are sanctions. This is now the go-to tool for addressing conflicts, from Russia’s invasion of Ukraine to China’s alleged human rights violations.
But here’s where many persons have varied views: Are sanctions effective, or are they merely escalating tensions and fragmenting the global economy? Take the case of Russia. Following its invasion of Ukraine in 2022, the European Union, United States, Japan and Canada imposed sweeping sanctions, including freezing $300 billion of Russian sovereign assets and cutting off major banks from the SWIFT financial system. G7 countries, the European Union and Australia have frozen 260 billion euros of the Russian Federation’s Central Bank assets. Most of these assets are stored in Euroclear, the central depository registered in Belgium, mainly in securities, including European government bonds (Reuters, 2024). The reasoning was that sanctions would weaken Russia’s ability to finance its war efforts and indirectly support Ukraine. While these measures have undoubtedly strained Russia’s economy, they have also pushed Moscow closer to China and other non-Western powers, accelerating the creation of alternative financial systems. Not only that but the decision to confiscate assets have resulted in many countries expressing concerns and have dissented arguing that such activities are aimed at prioritizing political power over legal principles (Reuters, 2024). It begs the question, is this a victory for international law or a step toward a fractured global order?
Is international law even still a thing?
There can be many arguments in support of sanctions. They are often seen as a means of enforcing international law, but what happens when they are utilized wantonly? Doesn’t the unilateral application raise serious legal and ethical questions? Take for instance the fact that the United Nations Charter explicitly prohibits the use of coercive measures that harm civilian populations. Yet many sanctions regimes have done exactly that. For example, during the COVID-19 pandemic we saw that U.S. sanctions on Iran had been linked to shortages of life-saving medicines, contributing to a humanitarian crisis (Human Rights Watch, 2021). Critics argue that such measures violate the principles of proportionality and non-intervention enshrined in international law.
It seems that to speak about international law is purely a theoretical discourse and nothing else. On the surface, international law provides a framework for the legitimate use of sanctions, primarily through the United Nations (UN) Charter. Article 41 of the Charter explicitly authorizes the UN Security Council to utilize a variety of measures to enforce its decisions. It provides a means of maintaining or restoring international peace and security. However, the reality is far more complex — and often far less reassuring.
Moreover, when one considers the unilateral nature of many sanctions what results is an undermining of the multilateral framework that has governed global affairs coming out of World War II. What stops other nations from unilaterally imposing sanctions without UN approval? China, for instance, has retaliated against Western sanctions by imposing its own trade restrictions, creating a tit-for-tat dynamic that erodes trust in international institutions. This is a recipe for disaster. Many countries feel that they don’t receive justice when they make challenges before international organisations, and can you blame them? Are we now witnessing the decline of a rules-based order, replaced by a system where might makes right? If powerful nations can bypass international institutions to impose sanctions, what purpose does international law serve?
Moreover, the lack of enforcement mechanisms within international law further weakens its authority. Even when sanctions are imposed multilaterally, there is no “global police force” to ensure compliance. Some countries have repeatedly found ways to circumvent sanctions through illicit trade networks and partnerships with non-compliant states. This begs the question: Is international law merely a symbolic gesture, rather than a practical tool for governance?
A fragmented system of global trade
The economic fallout from sanctions is reshaping global trade in profound ways. The erosion of trust in international law has led to the emergence of alternative systems. Traditional supply chains are being disrupted, and countries are increasingly turning to regional alliances and alternative currencies to bypass Western-dominated systems. For instance, Russia and China have significantly increased their use of the Chinese yuan for bilateral trade, reducing their reliance on the U.S. dollar. Similarly, India has begun trading with Russia in rupees, while the BRICS nations (Brazil, Russia, India, China, and South Africa) have not definitively dismissed the idea of exploring the creation of a new reserve currency.
This shift has far-reaching implications. The U.S. dollar has long been the cornerstone of global trade, but its dominance is now being challenged. If more countries adopt alternative financial systems, it could weaken the dollar’s position as the world’s reserve currency, with ripple effects across the global economy in ways that we have not fully appreciated. Not only that, but a lot of countries have been calling in investments and have been increasing holding gold as a store of wealth. Are we heading toward a bipolar or even multipolar financial system, and what does that mean for global stability?
The human cost of sanctions: Who really suffers?
While sanctions are often framed as a targeted tool, their impact on ordinary citizens cannot be ignored. The reality for many countries is that sanctions have exacerbated economic decline and poverty, increased mortality rates, inflation and food insecurity, leading to widespread suffering (Center for Disaster Philanthropy, 2024). If international law cannot prevent such outcomes, can it truly be said to govern sanctions effectively? Critics argue that sanctions disproportionately affect the most vulnerable in society, while doing little to change the behaviour of many regimes. Is it ethical to use economic coercion as a political tool when the human cost is so high?
Rethinking sanctions in a multipolar world
The new Cold War presents a stark challenge: how can the international community address aggression and human rights abuses without resorting to measures that harm civilians or fragment the global economy? One potential solution is to reform the sanctions regime, ensuring that measures are targeted, time bound and subject to multilateral oversight. Additionally, greater emphasis should be placed on diplomacy and conflict resolution, rather than relying on economic coercion as a first resort. Again, the pessimist in me will say, so what? What if certain players just ignore it as they have consistently done?
At the same time, the rise of alternative financial systems underscores the need for a more inclusive global order. If the West wants to maintain its influence, it must address the grievances of emerging powers and work toward a system that reflects the realities of a multipolar world.
Conclusion
The new Cold War is not just a geopolitical contest; it is a battle for the soul of the global order. Sanctions, while powerful, are a double-edged sword — let’s not fall on it. Certainly, sanctions can pressure “rogue states” and uphold international norms, but they can also erode trust, harm civilians and accelerate the fragmentation of the global economy. As we navigate this uncertain landscape, one thing is clear; the world cannot afford a return to the mercantilist zero-sum politics of the 20th century. The stakes are too high, and the consequences too dire. Will we learn from history or are we doomed to repeat it? My parting question is this: do we want a world where might makes right or one where the rule of law prevails? The answer will determine not only the future of sanctions but also the future of global governance itself.
Hodine Williams has over 20 years of experience in law, corporate governance and regulatory compliance across the legal, financial, hospitality and engineering sectors. A former prosecutor and expert in digital forensics, financial crimes and cyber law, he has advised corporations in Jamaica, Canada and the United Kingdom. Holding a master of laws in international business law from Osgoode Hall Law School, along with degrees in management and economics and law, Williams is also an educator, philanthropist and advocate for youth development and racialized communities. You can reach him at hodine.williams@gmail.com.
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